Tienwah's net profit increased by 79% y-o-y to RM8 million on the back of a 14%-increase in turnover to RM102 million. Compared to the immediate preceding quarter (QE30/6/2011), Tienwah's net profit remained unchanged while turnover inched up 3%. The improved bottom-line on y-o-y basis was attributable to higher turnover, better operating margin & a forex gain of RM1.9 million.
Table: Tienwah's last 8 quarterly results
Chart 1: Tienwah's last 15 quarterly results
Valuation
Tienwah (closed at RM1.69 now) is trading at a PE of 5.3 times (based on projected full-year EPS of 32 sen). At this multiple, Tienwah is deemed attractive.
Technical Outlook
Tienwah's share price has been trapped within a band which has become narrower in the past 2-3 years. The stock's next price direction will be determined soon. Will it continue to trade sideway or will it break above or below the band. I am inclined to believe that the stock is likely to break to the upside of the band at RM2.00-2.05.
Chart 2: Tienwah's monthly chart as at Nov 1, 2011 (Source: Tradesignum)
Conclusion
Based on good financial performance & attractive valuation, Tienwah is a good stock for long-term investment. A break above RM2.00-2.05 would signal its next upleg.
6 comments:
Hi Alex,
Can you share your view on the joint venture between Dijaya and Ivory? http://announcements.bursamalaysia.com/EDMS/edmsweb.nsf/all/61D7FFD46BED769D4825794500317026/$File/Dijaya%20Announcement.pdf
ch hLD - capital repayment + dividend at Rm5.10
after the capital repayment and dividend, will the share price become RM 5.2- 5.10 = RM0.10?
Tq
Hi Ivan,
You are correct. Effectively, your basis cost after the capital repayment & special dividend is 10 sen per share.
Hi Keen
The joint venture between Dijaya and Ivory is likely to be positive for both parties as the Penang property market still looks good.
While the Malaysian property market is still fairly resilient, I noted that the Property Index (for property stocks) had corrected in line with the overall market in August & September. Property stocks had also recovered like other stocks in the past few weeks but they are now moving sideway.
If our real property market can sustain, those who place big bets like Ivory or Dijaya would win big. If the real property market begins to falter like in Hong Kong or China, those who place big bets would be badly hit.
Hi alex,
Do you mind to shed some light on Muhibbah, I realize that Muhibbah has very strong order book on hand that valued RM3.2billion, however muhibbah also facing the APH issue.
Is it recommend to hold this counter as i oredi bought it
Hi Alex,
May i check with you when monitoring glove stock, which rubber price indicator should be monitor as more accurate?
Tokyo Commodity Exchage or Malaysia Rubber Board?
Today, the rubber price seems advance both TOCOM and Malaysia rubber board except latex in bulk price still lower. Do you know which raw material is the use to manufactuer glove-SMR 20, SMR 10, SMR 5 or latex in bulk?
Thanks.
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